The Chinese business environment is known to be harsh, full of cutthroat competition and bare-knuckle tactics. The country’s online trading industry is no exception as some brokers have already discovered after undergoing various ordeals ranging from DDos to physical attacks.
On Friday we reported that, according to media reports from China, a large group of traders and affiliates came to the local offices of an international broker to protest wrongdoings, posting photos of the incident. The complete picture of the situation has now emerged, showing the broker as the victim of a blackmail attempt.
The firm has shared documents with Finance Magnates revealing that the mastermind behind the protest was a certain Mr. Yang, an affiliate of AETOS who had simply lost money trading with the broker. Mr. Yang thought he had performed a valuable service and therefore deserved a reward for his efforts in his affiliate capacity. Therefore, he demanded that AETOS return all of his client’s initial deposits to him, and in order to achieve this purpose, tried to extort AETOS.
Boosting Profits in Low FX VolatilityGo to article >>
In emails sent to the broker, Mr. Yang used previous incidents of IronFX as examples, threatening AETOS that he would take action if they refused to return his funds. His plan was to put pressure on the local government and police by contacting the media after hanging protest banners in ten cities where AETOS offices are located.
As the broker is regulated by ASIC, it has a clear compliance procedure for customers. If he indeed had a case, Mr. Yang should have reported it to the Australian watchdog, gone to the Chinese authorities or even taken a legal approach and sued AETOS. He did not do any of the above and made the decision to try and extort the broker. He also spread false rumors that the broker has a small office and a staff of four people in Australia, forcing AETOS to publish photos of its offices to prove its size to Chinese clients.
In addition to the blackmail emails sent from Mr. Yang, AETOS also shared with us letters of complaint to the Shanghai Police and Chinese Embassy in Australia, both sent back in May.